Increases in Minimum Wage and Earned Income Tax Credit Took Effect on January 1, 2016
BOSTON — Over 450,000 hardworking families across Massachusetts will now receive a raise, as the state minimum wage increased to $10 an hour and the state Earned Income Tax Credit expanded by over 50% on January 1, 2016.
“This New Year, Massachusetts takes a critical step towards addressing income inequality and lifting all families throughout the Commonwealth,” said Senator Sal DiDomenico, Vice Chair of the Senate Committee on Ways and Means. “With the simultaneous raise in the minimum wage and increase in the state’s Earned Income Tax Credit, we are able to put more money back into the hands of hard working men and women and reward those who are doing their very best to get ahead. My colleagues and I in the Senate are committed to supporting all working families, and we will continue our efforts to move everyone in our Commonwealth forward.”
“We live in a Commonwealth, which means that everyone must share in the prosperity of our vibrant economy, not just those at the top. The Senate has made shared prosperity a guiding principle of our work. By increasing the minimum wage and expanding the Earned Income Tax Credit, we will put money into the pockets of working families, and grow our economy from the bottom up instead of the top down. I am proud of the Senate’s leadership in securing these reforms, which speak volumes about the kind of place we want Massachusetts to be,” said Senate President Stan Rosenberg.
The minimum wage increase to $10 an hour will raise the average earnings of a minimum wage worker by about $2,000 a year. According to estimates, this increase will reduce the number of Massachusetts residents living below the federal poverty level by about 3%.
The Senate passed the minimum wage increase in November 2013, with the House following suit in April 2014. Governor Patrick signed the final legislation in July 2014.
The Earned Income Tax Credit (EITC) expansion will provide up to $500 in additional income to working families with at least three children. Families receiving the EITC have higher long-range earning potential and increased social security benefits. Children in EITC households have increased academic scores and high-school graduation rates.
The expansion of the Earned Income Tax Credit was proposed by the Senate in May 2015, with final passage in July 2015.